How online advertising works

NPR has a pretty good article about an independent film maker who found her movie on a bunch of pirate sites. That happens all the time. What surprised the film maker was the amount of legitimate brands and ads being shown on these bad websites.

"The ads were not limited to cheesy online gaming sites, etc. Rather they include a number of legit companies like Sony, Radio Shack, Porsche, AT&T, Chase, Auto-Zone and even Netflix."

The film maker approached some of the brands like Netflix and though they said they "...do whatever we can to protect the Netflix brand," The ads still show up on pirate sites.

The problem is that Netflix has very little control over that.

Traditional advertising and online advertising work in completely different ways. With a highway billboard a company buys the board for a period of time and chooses which boards to be placed on. That's why in major cities you'll see street names and community names in the ads.

In the online world most ads rotate multiple companies. If you refresh a website you'll see different ads on every refresh. This rotation is done by an "advertising network". One of the biggest networks is Google's "Adsense" network. Google displays ads that are relevant to what the site is showing. Which means a DVD torrent site would have ads for Netflix because it is DVD related. Google automatically places the ad based on the content of the website.

Netflix advertises on thousands of sites a day automatically. It is logistically impossible for them to go through every single site they advertise on to make sure it's good for their brand. It is far easier to trust Google's Algorithm. For every pirate or virus infested site the ad shows on, it also shows up on thousands of legitimate sites.

On the other end of the spectrum, if the site is taken off an ad network. Say Google Adsense, they will simply jump to another such as Project Wonderful. Most companies have ads on multiple ad networks repeating the cycle.

Removing a site from an ad network isn't easy. According to the film maker:

"I not only have to list the URL of the page but have to copy and paste links to every link to infringing content. You can easily see what a burden this places on us while Google/AdSense/Doubleclick etc. could easily prevent it."

When in fact it would not be easy to prevent. If there was an automatic way to do it there would be tons of false positives. Many site owners live off the money from an ad network. A manual system is in place to prevent these false positives.